Colombia Congress approves 2027 budget as fiscal strains deepen

BOGOTA, Sept 14 - Colombia's Congress on Monday approved the government's 2027 spending budget of 634.9 trillion pesos ($206.6 billion), amid a sharp deterioration in public finances that is expected to push the fiscal deficit to a record high next year.

The Senate and lower house approved the bill after lawmakers sent back an initial proposal, allowing the recently inaugurated government of right-wing President Abelardo De La Espriella to incorporate additional funding needs, including those arising from the 7.4-magnitude earthquake that struck the country in August.

“This is not the budget we would have liked to start our term with, but it is the budget we can afford given the current state of the national economy,” Finance Minister Miguel Gomez told Congress on Monday.

The budget projects a record fiscal deficit of 9.4% of gross domestic product (GDP), which will have to be financed largely through an increase in public debt.

But De La Espriella's government plans to submit a tax reform package known as the "Rescue Law," aimed at reducing public spending next year in an effort to lower the fiscal deficit to 7.2% of GDP, the same level projected for 2026, Gomez has said.

Juan Carlos Ramirez, the head of the Independent Committee for Fiscal Rule Management (CARF), told Reuters in late August that Colombia would face a more critical public finance situation if the 2027 budget as proposed by the government was approved.

President De La Espriella said in a speech on Sunday that the country's fiscal situation is critical and blamed the government of his predecessor, leftist Gustavo Petro, for the deterioration, which he said stemmed from corruption and the misuse of resources, though he did not provide any evidence for his claims. REUTERS